Don't let it get away!

The retail sector has become a minefield for investors as consumer behavior changes rapidly every year. Once-dominant players like Best Buy (NYSE: BBY) and Sears have been relegated to has-been status while online retailers Amazon.com and eBay take more share. Target and Wal-Mart nervously try new store concepts and add more online shopping to try to stay relevant and ahead of the game.

So, what does the future of retail look like? I recently took a trip around one of the largest malls in the U.S. -- Minnesota's Mall of America -- and it may hold some answers.

The showroom floor Buying products online is oftentimes cheaper than buying in a bricks-and-mortar store that requires staff, inventory, and overhead. The challenge for online retailers is showing off what they have without a buyer being able to touch it. This is where the showroom comes in.

At The Mall of America, a trend of brand showrooms has emerged in recent years. Apple made the trend popular by allowing customers to come in and play with devices, turning that into sales both online and in other retail outlets. But others have followed the lead. Microsoft displays the Surface and Xbox at its store across the hall. Oakley has made its way from protective cases at sporting-goods stores to multiple locations in the mall. Brands like Bose, Nike (NYSE: NKE) , Disney (NYSE: DIS) , Puma, Steve Madden, and many others have also popped up with their own stores. These may be retail outlets, but they're also showrooms for online shoppers looking to get a look at and feel for products they may buy.

Straight to the source Best Buy may not benefit from a test run by consumers in their stores, but Nike, Oakley, Microsoft, Apple, and others brands do. Nike doesn't care if you buy a new shirt from their retail store or from Amazon, as long as you're buying Nike. For companies that strictly do retail, there's no return on that experience once you leave the store.

No longer do retail chains hold sway over brands. Companies with strong brand names can go straight to the consumer, providing the showrooms consumers are looking for.

The future of retail It's become apparent that the large chain store model is slowly dying. Sears is on its last leg, J.C. Penney is a complete mess, and Best Buy is having trouble competing with online retailers. Even Bloomingdale's left the Mall of America last year, leaving Macy's, Nordstrom, and a struggling Sears as anchors.

With competition dying, there may be a place for one or two department stores like Macy's to be left standing, but this isn't a bet I would like to make.

The way to play retail now is to go straight to the source. Nike, Under Armour (NYSE: UA) , Disney, lululemon athletica (NASDAQ: LULU) -- these are the new faces of retail. The distribution channel may change from department stores to Amazon to branded sites to whatever is next, but the brand will be the constant in our retail future.

Betting on a retail outlet -- bricks-and-mortar or online -- is a guessing game at this point. Companies will rise and fall and no one will make a significant amount of profit because price is the great equalizer in retail. Your investing dollars are better spent on brands that will win no matter who the end seller is.

More expert advice from The Motley FoolLululemon has the potential to grow its sales by 10 times if it can penetrate its other markets like it has in Canada, but without question, the competitive landscape is starting to increase. Can Lululemon fight off larger retailers like Gap and Nordstrom, and ultimately deliver huge profits for savvy investors like yourself? The Motley Fool answers these questions and more in our most in-depth Lululemon research available for smart investors like you. Thousands have already claimed their own premium ticker coverage, and you can gain instant access to your own by clicking here now.

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Brick and mortar retailers must rise above the stupid position of being no more than an open box exchange... or perish. Here is one concept:

The greatest cost to consumers is obsolescence, which in turn, is the greatest profit to manufacturers. Manufacturers no longer offer product exclusivity to retailers. Ergo, retailers are cut out of the obsolescence bonanza. A smart retailer could become an exclusive guardian protecting his customer from product obsolescence designed by manufacturers. Many bright unemployed engineers would jump at the opportunity to engineer point-of-purchase upgrade installs and train personnel to install the upgrades in obsolesced product. The upgrades would be considered as repairs and not patent infringements. This argument would prevail in court because the intent of the manufacturer could be challenged. The only way a manufacturer could defend intent is to offer exclusive upgrade services under patent at point of sale. Manufacturers do not want to become repair outlets. Even Apple stores refuse to accept their obsolesced junk.

Charges for these services must be profitable yet offer enough savings incentive to motivate consumers as well as being competently executed. Therein lies the challenge, the path to survival and perhaps a growth industry for retailers. Only the most innovative of retailers (oxymoron?) can rise to this challenge.

The old traditional department stores like Bloomingdale's, Nordstrom, Macy's etc. make little or no effort to to make shopping on their websites easy or appealing.

For example: Imagine you're shopping for a sweater. Zappo's will give you detailed information about that item including a video of someone modeling it. Many sellers on EBay give detailed garment measurements. Compare that with the brief description provided by a department store website.

I wonder what Peter Lynch would think of this, I remember how he liked to target good companies in dying / shrinking industries. Alludes to this in his book and then making a killing off PM when cigarettes were becoming taboo.

Could one of those successful retail distributors, e.g. Nordy's, or mebbe Macy's, be a good PM candidate going fwd? Admit it could be a risky bet, but perhaps also big rewards for the distributor that does it best and still retains foot traffic and $$$ and not just traffic, like in Best Buy's case.

The baby boomers heading for the door may be a large part of the retail problem along with so much turmoil financially and politically in the world.Could mean 70% of the economy in the form of retail is going to have to change.

I'm guessing in the near future that online sales will have to start paying state sales tax. I can't believe with todays economy the cash strapped states haven't done this allready. It would be billions of dollars in sales tax.

For maybe 20 years now (don't recall exactly how many) states have been trying everything they could think of to get online sales tax. They've tried various political tactics in the Congress, numerous legal strategies in court battles with the online retailers, and also tried working out some negotiated agreement with online retailers. The states are well aware of the sales tax revenue they're losing. The online retailers have vigorously fought paying sales tax. It's a complex issue to follow, so I haven't a guess whether states will succeed in the near future or even in the long run.

DJDynamicNC, Because online retailers complained that the myriad state and local sales rates were too complex to impose on customers, the proposal was floated maybe 15 years ago in Congress to have a flat rate Federal sales tax that would be sent to states. Online retailers and internet proponents objected to it, and It failed to gain much support.